In cases where no recapitalisation has been effected for a considerable series of years the yearly earnings of such businesslike coalitions have been known to approach fifty percent on the capitalised value. Commonly, however, when earnings rise to a striking figure, the business will be recapitalised on the basis of its earning-capacity, by issue of a stock dividend, by reincorporation in a new combination with an increased capitalisation, and the like. Such augmentation of capital not unusually has been spoken of by theoretical writers and publicists as an increase of the community's wealth, due to savings; an analysis of any given case is likely to show that its increased capital value represents an increasingly profitable procedure for securing a high price above cost, by stopping the available output short of the productive capacity of the industries involved. Loosely speaking, and within the limits of what the traffic will bear, the gains in such a case are proportioned to the deficiency by which the production or supply under control falls short of productive capacity. So that the capitalisation in the case comes to bear a rough proportion to the material loss which this organisation of sabotage is enabled to inflict on the community at large; and instead of its being a capitalisation of serviceable means of production it may, now and again, come to little else than a capitalisation of chartered sabotage.
Under the new dispensation of peace and security at large this manner of capitalisation and business enterprise might reasonably be expected to gain something in scope and security of operation. Indeed, there are few things within the range of human interest on which an opinion
may more confidently be formed beforehand. If the rights of property, in their extent and amplitude, are maintained intact as they are before the law today, the hold which business enterprise on the large scale now has on the affairs and fortunes of the community at large is bound to grow firmer and to be used more unreservedly for private advantage under the new conditions contemplated.
The logical result should be an accelerated rate of accumulation of the country's wealth in the hands of a relatively very small class of wealthy owners, with a relatively inconsiderable semi-dependent middle class of the well-to-do, and with the mass of the population even more nearly destitute than they are today. At the same time it is scarcely to be avoided that this wholly dependent and impecunious mass of the population must be given an appreciably better education than they have today. The argument will return to the difficulties that are liable to arise out of this conjuncture of facts, in the way of discontent and possible disturbance.
Meantime, looking to the promise of the pacific future in the light of the pacific past, certain further consequences, particularly consequences of the economic order, that may reasonably be expected to follow will also merit attention. The experience of the Victorian peace is almost as pointed in its suggestion on this head as if it had been an experiment made ad hoc; but with the reservation that the scale of economic life, after all, was small in the Victorian era, and its pace was slack, compared with what the twentieth century should have to offer under suitable conditions of peace and pecuniary security. In the light of this most instructive modern instance,
there should appear to be in prospect a growth of well-bred families resting on invested wealth and so living on unearned incomes; larger incomes and consequently a more imposingly well-bred body of gentlefolk, sustained and vouched for by a more munificent expenditure on superfluities, than the modern world has witnessed hitherto. Doubtless the resulting growth of gentlemen and gentlewomen would be as perfect after their kind as these unexampled opportunities of gentle breeding might be expected to engender; so that even their British precursors on the trail of respectability would fall somewhat into insignificance by comparison, whether in respect of gentlemanly qualities or in point of cost per unit.
The moral, and even more particularly the aesthetic, value of such a line of gentlefolk, and of the culture which they may be expected to place on view,—this cultural side of the case, of course, is what one would prefer to dwell on, and on the spiritual gains that might be expected to accrue to humanity at large from the steady contemplation of this meritorious respectability so displayed at such a cost.
But the prosaic necessity of the argument turns back to the economic and civil bearing of this prospective development, this virtual bifurcation of the pacified nation into a small number of gentlemen who own the community's wealth and consume its net product in the pursuit of gentility, on the one hand, and an unblest mass of the populace who do the community's work on a meager livelihood tapering down toward the subsistence minimum, on the other hand. Evidently, this prospective posture of affairs may seem "fraught with danger to the common weal," as a public spirited citizen might phrase it. Or, as it would be expressed in less eloquent words, it
appears to comprise elements that should make for a change. At the same time it should be recalled, and the statement will command assent on slight reflection, that there is no avoiding substantially such a posture of affairs under the promised régime of peace and security, provided only that the price-system stands over intact, and the current rights of property continue to be held inviolate. If the known principles of competitive gain and competitive spending should need enforcement to that effect by an illustrative instance, the familiar history of the Victorian peace is sufficient to quiet all doubts.